Freelance vs salaried — the real numbers.
Section 44ADA lets you declare just 50% of gross professional income as taxable — the rest is treated as expenses without requiring receipts. Whether that beats your salaried alternative depends on your billing rate, regime, and the costs most comparisons ignore. Enter your numbers and see the breakeven, the tax difference, and the hidden costs side by side. FY 2025–26, verified against incometax.gov.in.
Type a salary and a billing target.
We'll run both paths through FY 2025-26 rules — presumptive taxation, GST registration, advance-tax timing, lost employer benefits — and tell you whether solo wins, by how much, and what billing rate you'd need to break even.
Five chapters, one verdict.
- 01Setupsalary · billing · scheme
- 02Presumptive44ADA · 44AD · limits
- 03Taxslabs · advance · regime
- 04Realitygst · health · benefits
- 05Verdictnet · delta · breakeven
What Section 44ADA actually does
Under Section 44ADA (presumptive taxation for professionals), you declare 50% of your gross receipts as taxable income. No expense ledger, no receipts, no audit — the government assumes the other 50% covers your business costs. For a professional billing ₹30 lakh annually, the taxable income is ₹15 lakh, not ₹30 lakh.
Who qualifies: Specified professionals under Section 44AA — doctors, lawyers, engineers, architects, accountants, technical consultants, and interior designers, among others. The gross receipt limit is ₹75 lakh per financial year. Above that, you fall into regular tax with mandatory bookkeeping and audit. Agencies, product companies, and roles that don't fit "professional services" don't qualify for 44ADA — they may qualify for 44AD (trading/business), which uses a 6% or 8% presumptive profit rate.
Regime interaction: Under the new regime with 44ADA, you get the ₹75,000 standard deduction but lose 80C, 80D, and HRA. Under the old regime with 44ADA, deductions apply, but the slab structure is less favourable. The calculator models both and shows which combination produces the lower liability.
Costs freelancers forget to model
Advance tax. Salaried employees have TDS handled by their employer. Freelancers must pay advance tax quarterly — 15% by June 15, 45% by September 15, 75% by December 15, and 100% by March 15. Missing the March 15 deadline triggers Section 234C interest at 1% per month on the shortfall. The calculator includes this in its cash-flow view.
GST registration. Once your gross receipts cross ₹20 lakh (₹10 lakh in certain states), GST registration is mandatory. You collect 18% GST from clients and remit it quarterly. This doesn't directly reduce your income, but it creates compliance obligations and can affect pricing if your clients are individuals who can't claim input credit.
No employer match on PF and no subsidised health insurance. A salaried employee at ₹25 LPA typically gets an employer PF contribution of ₹36,700/year and a group health insurance premium of ₹12,000–18,000/year paid by the employer. Freelancers absorb both. The breakeven calculator accounts for these costs; a salaried vs. freelance comparison that ignores them overstates the freelance advantage.
Read the complete 44ADA guide → billing thresholds, GST, advance tax, old vs new regime breakeven